In
order to promote low cost housing finance
in the country, it has been decided to define
the low cost housing as part of SBP’s
regulatory framework and allow certain regulatory
relaxations for banks/DFIs. To qualify under
low-cost housing finance, the borrower has
to fulfill the following criteria:
• Maximum value of the housing unit/apartment
up to PKR 3 million
• Covered area of the housing unit
/ apartment up to 850 square feet in urban
areas
• Loan size up to PKR 2.7 million
2. To further encourage and facilitate the
Banks/DFIs to pursue low-cost housing finance,
regulatory exemptions/relaxations in the
following Prudential Regulations (PRs) for
housing finance are being advised:
i. Regulation HF 4: Loan to Value
Ratio (LTV): LTV ratio of upto
90:10 shall be maintained for low cost housing
finance.
ii. Regulation HF 5: Limit on Exposure
against Real Estate Sector: Financing
extended to low cost housing, shall be exempted
from exposure limit of 10 percent on real
estate sector.
iii. Regulation HF-7: Property Assessment:
For the purpose of financing low cost housing
units, banks/DFIs are allowed to apply the
valuation of single unit on all the units
of the same society/colony instead of conducting
separate valuation for each unit constructed
on the same layout and size.
iv. Regulation HF 9: General Reserve against
Housing Finance: Banks/DFIs are
exempted from general reserve requirement
against the financing extended to low cost
housing.
3. All other instructions on the subject
shall remain unchanged.
4. Banks/DFIs are advised to ensure circulation
of these exemptions/relaxations in the regulations
for housing finance among all their offices/branches
for meticulous compliance in letter and
spirit.